Well come to our newsletter in May. You will find that it is filled with legal regulations in certain areas of business. We hope this newsletter to keep you updated on the latest legal news and be valuable for your operation. Thanks for your reading and we would love to hear your comments that could make our reports better and better.

1. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 1
CLIENT ALERT
No. 4 – May 2018 – Tokyo Consulting Group
I. TAXES
1.1 Official Letter No. 2765/TCHQ-TXNK dated 21 May 2018 of the General
Department of Vietnam Customs on guiding taxes and customs procedures of
export-processing enterprises
This Official Letter provides guidelines for foreign owned enterprises to purchase
goods from export-processing enterprises as follows.
(i) The export-processing enterprise shall be named in and directly export goods to
foreign traders in accordance with the request of the FDI enterprise:
- Customs procedures: the export-processing enterprises shall bear the
names of the exporter and the name of the FDI enterprise will be stated in
the remark item on the customs declaration;
- Tax policy: goods from non-tariff zone are not liable to export duty and
apply the VAT rate of 0%.
(ii) The FDI enterprise directly performs the export process; however, the fact that
the goods are delivered from the warehouses of the export-processing enterprise
to border gates in accordance with designation of the FDI enterprise. The
designation should be recorded in the sale contracts signed between the FDI
enterprise and its foreign trader.
- Customs procedures: the FDI enterprise and the export-processing
enterprise shall carry out the procedures for on-spot import and export.
The FDI enterprise continuously carries out the export procedures.

2. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 2
- Tax policy: the FDI enterprise has to pay import duty and VAT when
purchasing goods from the export-processing enterprise and will be
refunded when exporting.
1.2 Official Letter No. 1802/TCT-TNCN dated 16 May 2018 of the General
Department of Taxation on reduction of PIT for terminally ill patients
Under the guidance of this Official Letter, individuals with coronary artery disease
treated by stenting will be considered as terminally ill patients. If these patients have
complete applications under the direction of medical authorities or doctors, they will
be entitled to PIT reduction in accordance with regulations.
1.3 Official Letter No. 1801/TCT-TNCN dated 16 May 2018 of the General
Department of Taxation guiding on PIT
In case an enterprise pays charges for hiring consulting services or charges for
making temporary residence cards, visas for its foreign employees, these incomes will
be incomes liable to PIT.
Tuition fees for children of labourers from preschool to high school paid by the
enterprise will not be accounted taxable incomes in the following two cases:
(i) children of foreign employees in Vietnam to study in Vietnam; or
(ii) children of Vietnamese employees overseas to study overseas
With regard to the benefit expense paid by the enterprise (i.e. payments for skill and
qualification improvement training; payment for medical examination and treatment
of fatal diseases suffered by workers and their families) shall not be included in the
incomes liable to PIT.
Incomes earned in Vietnam of non-residents, regardless of locations of payment and
receipt, will be withheld 20% PIT from these incomes.

3. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 3
1.4 Official Letter 1690/TCT-BS dated 8 May 2018 of the General Department of
Taxation regarding VAT policies
Sub-contractors issue VAT invoices to investors as detailed below:
(i) these invoices are issued after the date on which the finished works or items
are accepted and transferred;
(ii) these invoices are in-put VAT invoices on goods and services used for the
production and sales of goods and services subject to VAT; and
(iii) all amounts in these invoices have been declared and paid fully by the sub-
contractors.
the investor will be entitled to declare in-put VAT deduction. However, the sub-
contractors shall be sanctioned for their violations on time of issuing these invoices.
1.5 Official Letter No. 2349/TCHQ-TXNK dated 2 May 2018 of the General
Department of Vietnam Customs regarding tax policies of imported goods to be
changed use purposes
For scraps and defective products after processing, producing, if their use purposes
have been converted (i.e. domestic consumption), their taxable value shall be
determined by the actual purchase price in accordance with methods for making
customs value.
For raw materials, surplus materials after the processing products, if their use
purposes have been converted (i.e. domestic consumption) with quality and
commercial value no longer the same as before, taxable value shall be determined in
accordance with the actual payment at the time of conversion in accordance with
Article 17.2 of Circular No. 39/2015/TT-BTC.
1.6 Official Letter No. 2088/TXNK-CST dated 27 April 2018 of the General
Department of Vietnam Customs on taxes of scraps used in export production

4. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 4
Pursuant to this Circular, there have not been any regulations on taxes for scraps and
deductive products used in export production. The General Department of Vietnam
Customs will propose to amend and supplement Circular No. 38/2015/TT-BTC dated
25 March 2015 guiding customs procedures, customs supervision and inspection,
export tax, import tax, and tax administration applied to exported and imported
goods.
1.7 Official Letter No. 1781/TXNK-CST dated 12 April 2018 of the Department of
Import-Export Tax on tax policy for scraps and defective products from export
production within tax-free allowance
Under the guidance of this Official Letter and Official Letter No. 11567/TCHQ-
TXNK dated 8 December 2016 of the General Department of Vietnam Customs
regarding scraps and defective products from raw materials, materials and
components imported for production of export goods, in case selling these scraps and
defective products for domestic consumption, the enterprise shall declare and submit
VAT, excise tax and environmental protection tax (if any) to customs offices in
accordance with regulations on conversion of use purposes of goods.
1.8 Official Letter No. 1738/TXNK-CST dated 11 April 2018 of the General
Department of Vietnam Customs
In case an enterprise importing raw materials and supplies for export production
(E31), has no production establishment and does not directly produce products for
export. The enterprise will engage the processing services from the processing
companies and receive the finished products for export (E62). The enterprise cannot
meet conditions for tax exemptions and will not be entitled to import tax exemption.
II. Accounting and auditing:
2.1 Official Letter No. 1980/TCT-KK dated 23 May 2018 of the General Department
of Taxation regarding submission of financial reports of small and medium-sized
enterprises

5. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 5
Small and medium-size enterprises (including very small-size enterprises) applying
accounting systems under Circular 133/2016/TT-BTC dated 26 August 2016, are
required to submit the financial reports to tax authorities, business registration
authorities and statistical authorities.
2.2 Official Letter No. 1813/TCT-CS dated 16 May 2018 of the General Department
of Taxation regarding e-contracts
Pursuant to this Official Letter, e-contracts signed between the Company and its
suppliers of e-invoice software shall be legally valid if these contracts meet all related
regulations in the prevailing Law on E-transactions. It is not required the Company to
submit the e-contracts to the tax authorities. However, e-contracts should be archived
by the Company and provided to the competent authorities if requested.
2.3 Official Letter No. 1406/TCT-DNL dated 20 April 2018 of the General
Department of Taxation regarding e-invoices
In case e-invoices issued for selling products, providing services, the Company is
required to inform the buyers about the format of e-invoices and the way for sending
invoices between the Company and its buyers. Notice forms could be posted directly
on the website or sent via email.
In case the buyer is not an accounting unit or is an accounting unit having application
and invoices proving the transactions between the Company and the buyer such as
economic contract, warehouses, goods delivery receipts, payment receipts, etc., the
Company shall make e-invoices on which the electronic signatures of the buyer is not
required.
When detecting an error in an e-invoice, the Company and the buyer are entitled to
make a written confirmation on such error which is signed by the legal
representatives or authorized representatives of each party. The Company shall make
a new e-invoice and send back to the buyer afterward.
The Company is allowed to convert e-invoices into paper invoices in accordance with
Circular No. 32/2011/TT-BTC. Buyers are entitled to use converted invoices for tax

6. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 6
declaration, deduction, and proof of origin of tangible goods in the process of
circulation and accounting archiving in accordance with the current regulations.
III. Bank
No updated related to business of enterprises.
IV. Labour
4.1 Decree No. 72/2018/ND-CP dated 15 May 2018 of the Government regarding
statutory pay rate
This Decree issued new statutory pay rate. As from 1 July 2018, the statutory pay rate
will be VND1,390,000 per month. Enterprises should pay attention to such
information for amending amount to be paid to State authorities (i.e. social insurance,
jobless insurance, etc.).
This Decree will take effect as from 1 July 2018 and replace Decree No.
47/2017/ND-CP dated 24 April 2017.
4.2 Official Letter No. 1806/LDTBXH-QHLDTL dated 11 May 2018 of the Ministry
of Labour, Invalids and Social Affairs regarding democracy regulation at
grassroots at the workplaces
Pursuant to this Official Letter, local labor authorities will strengthen inspection and
supervision of the implementation of grassroots democracy regulations at workplaces
as stipulated in Decree No. 60/2013/ND-CP dated 19 June 2013. The inspection and
supervision will pay attention to enterprises not having trade union or foreign
invested enterprises. If the inspected enterprise has any violation related to democracy
regulations, it will be administratively sanctioned.
V. Social Insurance
5.1 Notification No. 1044/TB-BHXH dated 25 May 2018 of the Social Security Office
of Ho Chi Minh City regarding email helplines for information

7. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 7
- Email helpline support: duongdaynong@hochiminh.vss.gov.vn
- Telephone helpline: (028) 39.979.039 - Extension 1111.
- Fax helpline: (028) 39.979.018.
5.2 Official Letter No. 893/BHXH-QLT dated 4 May 2018 of the Social Security
Office of Ho Chi Minh City regarding digital signatures in e-transactions
Pursuant to this Official Letter, enterprises having any increase or decrease of their
employees and salary for paying social insurance, health insurance, jobless insurance
shall make e-transaction records for declaration via software provided by the
following 7 providers:
(i) VNPT
(ii) TS24
(iii) Thai Son
(iv) Efy
(v) Viettel
(vi) Bkav
(vii) CNC
Enterprises could use software KBHXH issued by the Vietnam Social Security and
select type of authentication “Use digital certificates”.
Enterprises should pay attention to use their digital signatures to sign e-transaction
records. The records to be submitted without digital signatures shall not be legally
valid.
5.3 Notification No. 977/TB-BHXH dated 15 May 2018 of the Social Security Office
of Ho Chi Minh City regarding amendment of procedures and forms of receipt
of documents under one-stop shop
As from 21 May 2018, the Social Security Office of Ho Chi Minh City will adjust the
following procedures:

8. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 8
- Solving one-off social insurance allowances;
- Amending lump-sum social insurance allowances under customer price index,
annual average;
- Amending one-off social insurance allowance under Official Letter No.
5467/BHXH-CSXH dated 31 December 2014 of the Vietnam Social Security;
- Lump-sum region- based allowance (procedure No. 208);
- Receipt of application under form PGNHS 208
The procedures and instruction are detailed in this Notification.
5.4 Official Letter No. 817/BHXH-CST dated 24 April 2018 of the Social Security
Office of Ho Chi Minh City relevant to review and return of social insurance
books
Enterprises should urgently review information of paying social insurance,
unemployment insurance of their employees and shall submit social insurance books
that have not been reviewed (i.e. old forms, cover pages attached with information
pages) to the competent social security office.
Social insurance books are not required to submit to the competent social security
office in the following cases:
(i) Social insurance books have been reviewed and returned by the competent
social security office to enterprises
(ii) Social insurance sheets issued for employees working for enterprises since 2016
are not required to submit to the competent social security office.
In case information of paying social insurance, unemployment insurance in social
insurance books printed by the competent social security office are wrong or
insufficient, enterprises shall make e-transaction records under receipt form 600b and

9. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 9
submit to the competent social security office for amending. The social insurance
books are not required to submit for such cases.
VI. Export, import and distribution
6.1 Decree No. 69/2018/ND-CP dated 15 May 2018 of the Government regarding list
of products to be exported and imported in Vietnam
With regard to goods permitted for export, import, this Decree promulgated the
following lists:
(i) List of goods banned from import or export (Appendix I of this Decree);
(ii) List of goods appointed exporters and importers (Appendix II of this Decree);
(iii) List of goods imported and exported under permits and conditions (Appendix
III of this Decree);
(iv) List of goods affecting on national defense and security (Appendix IV of this
Decree);
(v) List of goods under the management of CFS (Appendix V of this Decree);
(vi) List of goods banned from temporary import, re-export and transit (Appendix
VI of this Decree);
(vii) List of frozen foodstuffs subjecting to conditional temporary import or re-
export (Appendix VII of this Decree);
(viii) List of goods imposed excise tax when temporarily importing or re-exporting
(Appendix VIII of this Decree);
(ix) List of used goods subjecting to conditional temporary import or re-export
(Appendix IX of this Decree);

10. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 10
(x) List of military uniform produced or processed under permits and used for
foreign armed forces (Appendix X).
This Decree took effect from 15 May 2018.
6.2 Official Letter No. 1406/GSQL-GQ1 dated 14 May 2018 of the General
Department of Vietnam Customs regarding import of used machine and
equipment
Used equipment is permitted to be imported into Vietnam when its lifetime does not
exceed 10 years.
When importing, a company needs to submit the following documents to the customs
offices, apart from customs dossier:
- 01 original certificate of manufacturing year and manufacturing standard issued
by the manufacturer of the used equipment in accordance with regulations;
- 01 original assessment certificate of manufacturing year and manufacturing
standard issued by an assessing organization of the used equipment in
accordance with regulations.
6.3 Official Letter No. 1282/GSQL-GQ2 dated 4 May 2018 of the General
Department of Vietnam Customs regarding import and export
The General Department of Vietnam Customs requires foreign invested enterprises to
register to supplement import and export activities in accordance with provisions of
the Law on Investment and Law on Enterprise before carrying out these activities.
6.4 Official Letter No. 1223/GSQL-GQ1 dated 24 April 2018 of the General
Department of Vietnam Customs guiding implementation of Decree 15/2018/ND-
CP
“Test samples whose quantities are suitable for the testing purposes and confirmed by
the owners” are exempt from state inspection of food safety upon the import.

11. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 11
Accordingly, when carrying out procedures for import, enterprises shall declare use
purposes of consignments and themselves take responsibility for using goods in line
with purposed declared with customs offices.
If enterprises change the use purposes of the imports from testing or research to
domestic use, they have to carry out the product self-declaration and food safety
inspection as prescribed.
6.5 Official Letter No. 1085/GSQL-GQ4 dated 16 April 2018 of the General
Department of Vietnam Customs regarding C/O
Pursuant to this Official Letter, C/O needs to be signed by the authorized official of
the exporting country and such signature should be announced to the customs office
of the importing country. Therefore, in case signature does not belong to the list of
signature samples recorded in the customs office, C/O will be rejected.
6.6 Official Letter No. 1083/GSQL-GQ4 dated 16 April 2018 of the Customs Control
and Supervision Department regarding faulty electronic C/O
In case an electronic C/O has technical errors/mistakes, the enterprise shall submit
written C/O in the form as stipulated in the Asian Trade in Goods Agreement to
customs offices. The preview of C/O is not acceptable.
6.7 Official Letter No. 1079/GSQL-GQ4 dated 16 April 2018 of the General
Department of Vietnam Customs regarding difference on HS codes
When HS code on C/O is different from HS code on customs declaration, customs
offices will base on declared information about name of goods, HS code and goods
description on the customs declaration, C/O and other documents included in the
customs dossier, result of physical inspection of goods (if goods have to be undergone
the physical inspection or the inspection is required to serve the verification of origin)
in order to determine the C/O’s validity.

12. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 12
If the difference between HS code on the C/O and the declared HS code does affect
nature of the imports, the customs office may consider accepting the validity of the
C/O.
VII. Investment
7.1 Decree No. 63/2018/ND-CP dated 4 May 2018 of the Government regarding PPP
“Investment in the form of public-private partnership” (hereinafter referred to as PPP)
means any form of investment on the basis of a contract between a regulatory agency
and an investor, a special purpose entity to build, innovate, operate and manage
infrastructure and public service project.
Investors may propose projects other than ones approved and announced by
ministries, regulatory bodies and People’s Committees of provinces.
The rate of equity shall be determined in accordance with the following rules:
- For a project funded by total investment of up to VND1,500 billion, the equity
shall account for at least 20% of such total investment;
- For a project funded by total investment of more than VND1,500 billion, the
rate of equity is determined according to the following rules: the rate of at least
20% accounts for equity up to VND1,500 billion, and the rate of at least 10%
accounts for the portion of equity more than VND1,500 billion.
This Decree is scheduled to come into effect since 19 June 2018 and replaces Decree
15/2015/ND-CP dated 25 December 2015.
VIII.Commerce
8.1 Decree No. 81/2018/NĐ-CP dated 22 May 2018 of the Government regarding
promotion activities, trade fairs and exhibitions
This Decree details implementation of the Commercial Law regarding certain
promotion activities, including sales promotion, trade fairs and exhibitions.

13. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 13
Principles of sales promotion are as follows:
- Sales promotion programs have to be lawful, truthful, and transparent and
disclosure and ensure lawful rights and benefits of consumers, traders and other
organizations or individuals.
- The trader carrying out the sales promotion programs has to ensure favorable
conditions for winners to receive prizes and take responsibility for settling any
complaint (if any) related to the sales promotion programs.
- The trader carrying out the sales promotion programs shall ensure the quality of
promoted goods and/or services as well as goods and/or services used for sales
promotion.
- The trader, before carrying out its sales promotion programs have to register
with the Department of Industry and Trade (within the province located the
head office of the trader) or the Ministry of Industry and Trade (from two or
more provinces).
- The implementation of sales promotion has to ensure:
+ not requiring customers to receive sales promotion to abandon, refuse or
exchange of goods bought from other traders or organizations;
+ not making any direct comparison on goods and/or services of the
enterprise with other traders’, organizations’ or individuals’.
- The trader is not allowed to use results of lottery for determining winnings in
certain cases in accordance with the law.
- The trader not registering multi-level sale activities may not carry out sales
promotion under multi-level models.

14. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 14
- The maximum discount rate for promoted goods or services must not exceed
50% of the price of such goods or services before the promotion period.
However, discount of 100% of the price of such goods or services is allowed for
concentrated promotional programs (i.e.hourly, daily, weekly or monthly
promotional programs, promotion seasons, or promotions in holidays).
- The promoted goods and goods used for sales promotion will not include
alcohol, lottery, cigarettes and medicine and other goods banned to be promoted
in Vietnam.
- The promoted services shall not include medical examination and treatment of
public medical establishments, educational services of public institutions, public
job-training institutions, and services banned from circulation or promotion in
Vietnam.
- Services used for promotion shall not include services banned from circulation
or promotion in Vietnam.
This Decree will take effect from 15 July 2018 and replace Decree No. 37/2006/ND-
CP dated 4 April 2006.
IX. Others
9.1 Decree No. 76/2018/ND-CP dated 15 May 2018 on technology transfer
Technology transfer activities in Vietnam, from abroad into Vietnam, or from
Vietnam to abroad, between related parties under the model of parent company-
subsidiary and between associated parties in accordance with provisions on tax, the
price auditing shall be carried out by technology appraisal in accordance with laws.
Enterprises having investment projects in the business lines given investment
incentives or in the administrative divisions given investment incentives, receiving
technology transfer from scientific and technological organizations on the basis of
contracts or certificates of technology transfer registration, shall be entitled to:

15. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 15
- be lent with preferential interest rate, and provided interest rate subsidy in order
to transfer technology
- be funded for implementation of scientific and technological tasks or supported
directly.
9.2 Official Letter No. 1031/BXD-GD dated 9 May 2018 of the Ministry of
Construction on inspection of construction activities
The local department of construction shall inspect all subjects involving in
construction for inspection and verification of the technical safety of machinery,
equipment and materials in order to ensure compliance with provisions of the
Ministry of Construction.
9.3 Circular No. 04/2018/TT-BTTTT dated 8 May 2018 of the Ministry of
Information and Communications regarding potentially unsafe goods under the
management of this Ministry
The Ministry of Information and Communications promulgates the following 2 lists:
(i) The list of information technology and communications commodities subject
to declaration and certification of conformity (Appendix I of this Circular);
(ii) The list of information technology and communications commodities subject
to declaration of conformity (Appendix II of this Circular).
Enterprises engaging in production and/or trading of technology and communication
products should review the above lists and comply with the provisions of this
Circular.
This Circular is scheduled to come into effect since 1 July 2018 and replace Circular
No. 42/2016/TT-BTTTT dated 26 December 2016.
9.4 Circular No. 03/2018/TT-BXD dated 24 April 2018 of the Ministry of
Construction on administrative sanctions in construction

16. Prepared by Tokyo Consulting Group – Ho Chi Minh Branch 16
This Circular guides the handling of administrative violations in construction
investment activities. The following are additional sanctions in addition to fines
stipulated in the Decree 139/2017/ND-CP:
(i) Suspending the construction permits;
(ii) Compensating for damages;
(iii) Demolishing the construction work or work items built inconsistently with
law regulations,;
(iv) Suspending the execution of the construction work for applying new
construction permits or amending the current ones;
(v) Submitting illegal benefits due to illegal construction
In case the company shows the construction permit (new one or amended one) in
time; however, the information in this permit does not match the actual state of the
construction work. The construction work is considered as a violation and required to
demolish.
This Circular took effect as from 12 June 2018 and replaces Circular No.
02/2014/TT-BXD dated 12 February 2014.
9.5 Official Letter No. 828/BXD-KTXD dated 16 April 2018 of the Ministry of
Construction on fines imposed on breaching construction contracts
The Ministry of Construction notes that the maximum value of fine imposed on
breaches of a construction contract is 12% of the value of the breached contractual
obligation portion. Apart from the fine imposed on breaching the contract, the
contractor has to compensate the investor for damages (if any).